Segmentation Features Life style change STP Pitfalls

Major Segmentation
To select the best product mix and target market , major segment variables of rural markets are to be

understood. These are:

1) 2) 3) 4) 5)

6)
7)

Region ( North / East / West / South) Size of population ( 1000 / 1500 / 5000 ) Climate ( hot / cold / moderate /rainy) Demography ( age / family size / gender) Income ( 2000 to 5000 / 5000 to 10000 / 10000 to 50000 / above 50000 per month) Education ( Literate / semi literate / illiterate) Occupation ( agriculture / non agriculture)

Factors for Segmentation

The other factors are:

1. Psychographics Lifestyle ( rigid / changing / imitating) Personality ( authoritarian / ambitious) 2. Behavioural Looks for benefits or quality 3. Others : User status/ usage rate /loyalty rate/ attitude to product / occasion

Rural Market Positioning

Rural Market Positioning could be: 1. Value for money ( in which product benefits and prices are highlighted)
Eg. : Kevin care shampoo @ Rs1

2. Life style ( in which product is demonstrated to

check fitness) Eg. : pajama- kurta-jacket for a teacher 3. Health Platform ( in which the product/ service highlights the linkage with health) Ex. : fat free food / diet coke

Rural Product Classification

Rural Products are classified into: 1) FMCG ( Brand such as HUL, Dabur, Colgate, Marico, Cavin care, Coke, Pepsi etc.) 2) Consumer Durables ( further categorised in three price range --- refer next slide) 3) Services ( telecom services, health care, life insurance, general insurance, banking) 4) Agri Inputs ( seeds, pesticides, tractor, implements, fertilisers)

Rural Consumer Durables Portfolio (NCAER Study)

NCAER Study
Number of product categories stocked by rural and urban

stores do not vary much (19 v/s 27) What does vary is no. of company's products (42 vs 92) Shop census indicates that shops in rural and urban do not vary in size (100 to 250sft) Largest brand by value in rural market are also the largest brand in urban India The truth is that there will be no rural or urban customers in India both will blend to leave one Indian customer in time to come

Social & Behavioral Influence

Rural consumer is influenced by environment and by his wants and perceptions. These greatly affect

the product, pricing, distribution, media the whole marketing strategy Cultural and social practices have major influences on the behavior of rural customers. Therefore, marketer has to:
Develop products that suit cultural practices Design media & message that reflect social behaviour Influence the perception by making available products

where consumer usually makes his purchases

Social and Behavioral Influence

Attitude to quality and price

Small pack size gets acceptance from daily labourers and small earners. He will buy something that has small unit price but will not certainly buy a cheap brand Brand preference and loyalty Consumptions of branded items account for 80% of sales. But brand pricing has to take into account both income level and income level

Attraction Factors
Global service providers (GSP) is making inroads to the

mass base of rural market. The characteristics for attracting GSP are: 1) Growing population 2) Needs and wants are skyrocketing 3) Growing sense of consumerism 4) Replication of urban life style 5) Increasing literacy 6) Augmented growth in agriculture 7) Influence of cross culture 8) Liberalized government rules

New Approach
Non conventional media are extensively used to target

rural consumers But before that, following aspects are to be kept in mind:
The target audience Social class and intentions Receptivity Brand consciousness Lifestyle Purchase needs

Dont sell dreams demonstrate is the new mantra

Control the Pitfalls

Dont adopt a quick fix strategy
Dont strip the frills offered to urban consumers and

think that product is ready for rural market Dont do cosmetic modification to the packaging (changing to vernacular language) Do not offer meaningless sales promotion give-ways